While public budgets are increasingly facing austerity, repayable instruments as means of political stimulus come to the fore. Especially in Cohesion Policy the use of repayable instruments, also known as financial instruments (FIs), has significantly increased over the last two programming periods and a further rise is expected for the 2014-2020 period. But the generally accepted advantages of repayable instruments over grants can be diluted by severe shortcomings in how FIs have been implemented. This paper examines some of the most important weaknesses of the FIs set up by Member States in the programming period 2007-2013 and assesses the extent to which the legal framework for the 2014-2020 period addresses these shortcomings.